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Bad, Bad Sign: Thumbplay Sold to Clear Channel for Peanuts...
presnikoff
Tuesday, March 01, 2011

This may have been the best exit possible, but everyone is still losing a lot of money. Late Monday, Clear Channel confirmed its purchase of Thumbplay, and insiders are pointing to a pricetag of peanuts. And, that description also fits the Thumbplay subscriber total: according to the Wall Street Journal, Thumbplay Music collected a mere 20,000 subscribers for its cloud-based subscription service. Clear Channel is planning to keep Thumbplay Music running, though there also appear to be technology integration plans with iheartradio.

So what happened? Thumbplay was playing with capital of about $41 million, a chunk of which was probably used to secure major label licenses. Thumbplay Music has a catalog of more than 10 million cloud-based songs from all four majors, and licensing is rarely a cheap endeavor. The fate of the rest of Thumbplay - including its ringtones and wallpapers business - remains unclear.

But what does this say about the subscription space, and what learning is there for over-funded, similarly-positioned startups like Rdio? Perhaps Thumbplay got the marketing wrong, or the timing was off, though this could be a broader reflection of demand for cloud-based (and paid) services. Across the board, subscriber tallies have been tepid, though in fairness, Pandora has managed to crack through the impossibleness of it all.

this was posted lately in the news of digital music news. thumbplay is a dead horse and i would jump off immediately if you're hooked. sell your stocks. now.